By Yasin Ebrahim
Investing.com – The S&P 500 closed at a record high Wednesday, as technology stocks were back in vogue among traders as a volatile quarter drew to a close.
The rose 0.44%, to close at a record of 3,976.11, the fell 0.26%, or 85 points, the was up 1.5%.
Tech closed the quarter up 2%, recovering from a nearly 9% decline from its February highs, helped by gains on the final day of the quarter as investor appetite for high-flying tech returned ahead of the next round of quarterly reports.
Microsoft (NASDAQ:), Google-parent Alphabet (NASDAQ:), Amazon.com (NASDAQ:), and Facebook (NASDAQ:FB), Apple (NASDAQ:), with latter getting an extra boost following an upgrade from UBS.
Microsoft racked up gains into the close after winning a 10-year contract from the U.S. Army worth a about $22 billion to deliver 120,000 devices based on its HoloLens augmented-reality headset, CNBC reported.
But it wasn’t only megacap tech that attracted a wave of buying. Chip stocks climbed nearly 3% led by a jump in Applied Materials (NASDAQ:) as Bernstein talked up the growth prospects for the sector.
Bernstein initiated coverage on Applied Materials at outperform, betting that “growth trends in the underlying semi market [are] likely to remain positive over the long term.”
Consumer discretionary stocks also played a role in pushing the broader market to record intraday highs, powered by Tesla (NASDAQ:) and apparel company Phillips-Van Heusen Corp.
PVH Corp (NYSE:) jumped 6% despite the company reported fourth-quarter earnings and revenue late-Tuesday that fell short of Wall Street estimates.
The economic backdrop, meanwhile, continues to spur investor optimism as the economy created 515,000 private jobs last month, just shy of the 550,000 expected, but the gain serves as a good omen for nonfarm payrolls report due Friday.
The economy could potentially be in line to receive another stimulus-led boost as President Joe Biden is set to unveil a $2 trillion two-part stimulus plan later on Wednesday. The first part will focus on infrastructure and clean energy, and a second will be focused on domestic and social issues.
But there are already grumbles from lawmakers on the opposite side of the political aisle, who are wary of further spending — following $5.7 trillion of Covid-19 relief measures rolled out over the past year — and are unlikely to back the tax hikes needed to fund the bill. The tax hikes could force corporate America to tighten its built, with some suggesting that stock buybacks and dividends would likely be curtained to absorb the potential tax hit.
Energy, down nearly 1%, lagged the broader market’s advance as oil prices fell below $60 a barrel on fears over global demand after France widen lockdowns nationwide following a spike in Covid-19 hospitalizations. The swing lower in oil comes ahead of OPEC’s decision on output quotas for May. Many are expecting no change to output.
Oil prices were also swayed by data showing U.S. weekly inventories slipped by 876,000 barrels last week, confounding economists’ forecast for a build of 107,000 barrels.
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